At least that confusing rideshare question isn’t on the ballot

Issue now falls to the Legislature, but reliable data on gig sector are scant

IN NOVEMBER, voters will have to sift through complicated issues in the form of ballot questions like a tax surcharge on high earners and more arcane matters such as one about dental insurance. But they can thank the state Supreme Judicial Court for having one less complex issue to deal with. The SJC declared a question on whether app-based rideshare and delivery drivers were independent contractors or employees unconstitutional, knocking it off the November ballot. Not only is the issue complicated, but it’s one that voters would have had to decide in the face of a lack of reliable information. 

The question would have affected tens of thousands of workers and even more riders and users, but it doesn’t go away; it just goes back to the Legislature. With scant data on this emerging workforce, one wonders whether lawmakers can educate themselves sufficiently to create a solid regulatory framework for gig industries.

We lack even the most basic information lawmakers need. For example, how large is the gig workforce?  How much do gig workers earn? What are their demographic characteristics?

There are, of course, some data on the industry and its workers; but none of it is comprehensive. Some comes from small surveys; most studies deal with only a portion of the app-based rideshare and delivery labor force.

The best data available suggest that between 4 percent and 9 percent of the overall workforce is involved in the gig economy. The number was dramatically affected by the pandemic—around 15 percent of US adults report being engaged in gig work at some point during 2021.

Another factor that makes the nature of the workforce so hard to pin down is that it appears that rideshare and delivery drivers are more likely to do it as a source of supplementary income rather than as their main source of support. Data suggest that many workers engage with the industry after a financial setback, then stop when they return to the traditional workforce.

Information from the app-based companies themselves indicates that the workforce is heavily male, about half White and 20 percent each African American and Hispanic. It suggests that workers are around the national average in both age and overall income, although there are wide discrepancies in the earning data.

The Massachusetts ballot initiative was based on a California referendum that was adopted in 2020 with about 60 percent of the vote. As was the case in the Commonwealth, it was backed by app-based rideshare and delivery companies such as Uber, Lyft, and DoorDash, and its provisions reveal their priorities. It classifies drivers as independent contractors, guarantees minimum earnings, and provides health care subsidies and vehicle insurance. But it also exempts workers from overtime and blocks their access to unemployment insurance and workers compensation.

The available evidence suggests that most rideshare and delivery drivers view themselves as independent contractors, and about 8 in 10 rate their job experience favorably, although the data are again imprecise.  There appears to be wide variety in how much drivers value the flexibility the work provides.

If the Legislature were to determine that the drivers are employees, it would give the workers additional benefits. But they would no longer be able to work for competing platforms (both Uber and Lyft, for example), and they would have to commit to a fixed schedule.

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It’s unclear how the change would affect the labor supply. On one hand, it would likely force out those who prize flexibility and can’t or won’t commit to a fixed schedule. On the other, enhanced benefits and worker protections might attract some new workers.

App-based rideshare and delivery companies are important parts of an emerging and important industry.  Like any sector, it would benefit from a common-sense regulatory regime. But providing that will require lawmakers to do their homework to determine the size of the labor force, what it looks like, what portion of its overall income comes from driving, and what its priorities are. And right now, the available data appear to offer little more than educated guesses about the answers to these important questions. 

Charles Chieppo is a senior fellow at Pioneer Institute, a Boston-based think tank.